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TERM NOTE
$4,000,000 October 2, 1998
Norwich, Connecticut
For value received, the undersigned, Xxxxxxx International, Ltd. (the
"Borrower") promises to pay to the order of XXXXXXX PARTNERS, LLC ("Lender") at
the office of its agent, c/o Xxxxxx X. Xxxxxxxxx, Xxxxx Family Interests, 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000 or at such other place as Lender may
designate, the principal sum of FOUR MILLION DOLLARS ($4,000,000), together with
interest on the unpaid balance of this Note at the rate of eight percent (8%)
per annum, beginning on the date hereof, before or after maturity or judgment,
which interest shall be computed on the basis of a 360-day year and actual days
elapsed, together with all taxes levied or assessed on this Note or the debt
evidenced hereby against Lender, and together with all costs, expenses and
reasonable attorneys' fees incurred in the collection of this Note, or to
enforce or foreclose any security agreement or other document including, without
limitation, the Agreement (as hereinafter defined), securing or relating to this
Note, or in protecting or defending the lien of said security agreement or other
document, or in any
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litigation or matter arising from or connected with said security agreement,
other document, or this Note. This Note is the Term Note referred to in, and is
entitled to the benefits of, that certain Loan and Security Agreement dated the
date hereof between Borrower and Lender (the "Agreement"). Capitalized terms
used but not otherwise defined herein shall have the meanings ascribed to them
in the Agreement. The Agreement, among other things, contains provisions for (i)
acceleration of the maturity of this Note upon the happening of certain stated
events, (ii) for prepayments on account of principal hereof prior to the
maturity of this Note upon the terms and conditions specified in the Agreement
and (iii) the payment of interest at the Default Rate under certain
circumstances. The Agreement and all other instruments either relating to or
securing the indebtedness evidenced hereby are made a part of this Note and
deemed incorporated in full.
Interest shall be paid on the first day of each calendar quarter
beginning January 1, 1999, and continuing on the first day of each April, July,
October and January thereafter, until the principal balance with accrued
interest thereon is paid in full. Principal shall be paid in thirteen payments
as follows: (a) One Hundred Thousand Dollars ($100,000) shall be paid on the
first day of each month commencing on November 1, 1998 and continuing to and
including September 1, 1999; (b) Four Hundred
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Thousand Dollars ($400,000) shall be paid on October 1, 1999 and (c) the balance
together with all accrued and unpaid interest and all other unpaid amounts due
hereunder or under the Financing Agreements, shall be due and payable on October
1, 2003 or on such earlier date that this Note becomes due and payable as a
result of acceleration as provided in the Agreement (the "Maturity Date").
Upon the occurrence of an Event of Default under and as defined in the
Agreement, the entire indebtedness, with accrued interest thereon, due under
this Note, shall, at the option of Lender, become immediately due and payable
without demand or notice of any kind.
If any amount due hereunder is not paid within ten (10) days after the
date it is due, without in any way affecting Xxxxxx's right to accelerate this
Note, a late charge equal to five percent (5%) of said amount shall be assessed
against Borrower for each month that said amount is late, and shall be
immediately due and payable without demand or further notice of any kind.
Borrower hereby grants to Lender a lien and right of setoff for all of
Borrower's liabilities to Lender under this Note and the Agreement upon and
against all the deposits, credits, collateral and property of Borrower, now or
hereinafter in the possession or control of Lender or in transit to it. Lender
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may, at any time after the occurrence, and during the continuance, of an Event
of Default, apply or set off the same, or any part thereof, to any liability of
Borrower, whether or not matured or demanded.
Notwithstanding any provisions of this Note to the contrary, the rate
of interest to be paid by Borrower to Lender under this Note shall not exceed
the highest or the maximum rate of interest permitted to be charged by Lender
under applicable laws. Any amounts paid by Borrower to Lender in excess of such
rate shall be deemed to be partial prepayments of principal hereunder.
No delay or omission by Xxxxxx in exercising any right hereunder, nor
failure by Xxxxxx to insist upon the strict performance of any terms herein,
shall operate as a waiver of such right, any other right hereunder, or any terms
herein. No waiver of any right shall be effective unless in writing and signed
by Xxxxxx, nor shall a waiver on one occasion be constituted as a bar to, or
waiver of, any such right on any future occasion.
BORROWER HEREBY WAIVES TRIAL BY JURY IN ANY COURT AND IN ANY SUIT,
XXXXX OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY
RELATED TO THE FINANCING TRANSACTIONS OF WHICH THIS NOTE IS A PART AND/OR THE
ENFORCEMENT OF ANY OF XXXXXX'S RIGHTS AND REMEDIES. BORROWER ACKNOWLEDGES
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THAT IT MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY AND ONLY AFTER EXTENSIVE
CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS. NO PARTY
TO THIS NOTE HAS AGREED WITH OR REPRESENTED TO ANY OTHER PARTY HERETO THAT THE
PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
XXXXXXXX ACKNOWLEDGES THAT THE LOAN EVIDENCED BY THIS NOTE IS A
COMMERCIAL TRANSACTION AND WAIVES ITS RIGHTS TO NOTICE AND HEARING UNDER CHAPTER
903a OF THE CONNECTICUT GENERAL STATUTES, OR AS OTHERWISE ALLOWED BY ANY STATE
OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH BANK MAY DESIRE TO
USE, and further waives diligence, demand, presentment for payment, notice of
nonpayment, protest, and notice of protest, and notice of any renewals or
extensions of this Note, and all rights under any statute of limitations.
This Note shall be governed by and construed in accordance with the
laws of the State of Connecticut.
XXXXXXX INTERNATIONAL, LTD.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: President & CEO
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